Gone to Pot: Adelanto’s Green Land Rush

Gone to Pot: Adelanto’s Green Land Rush

By Kim Stringfellow

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The hardscrabble City of Adelanto (Spanish for “progress”) has a population of nearly 32,000 with one-third of its residents living below the poverty line. Many of these folks seem to have landed here without actively desiring to do so, including the nearly 3,400 individuals either incarcerated or detained at three private, county and federal prison complexes within Adelanto’s city limits on any given day.

On first impression, the town appears spare and lacking any kind of centralized identity—not unlike other similar-sized towns found in the western expanses of the Mojave Desert. Flat, with no unique natural geological features to boast, Adelanto is as an unremarkable landscape as they come. Discarded plastic bags and other free-range trash pepper undeveloped Joshua Trees plots not claimed by KB Homes, or one of the other corporate tract home developers that began colonizing this part of the desert during the 1990s. Unlike adjacent Victorville, which is sited along the picturesque Mojave Narrows riparian corridor, and prides itself as a Route 66 stopover with a fairly intact historic downtown district, Adelanto has no postcard viewscape or roadside nostalgia to celebrate.

The town instead is bisected in half by U.S. Route 395, the major truck route linking the Inland Empire at the south to the Eastern Sierra to the north and beyond. In this particular stretch of highway, big rigs barrel up and down the roadway in a continuous stream of container madness, punctuated by passenger vehicles that turn on or off onto the town’s few side streets, leading to cookie-cutter tract homes, several nondescript industrial parks, a San Bernardino sheriff station and several convenience store/gas stations, plus two lodging options in what appears to be the town’s center. Other than the new “Crossroads at 395” at Palmdale Road, a destination marketplace at the extreme southern end of the city limits showcasing the usual retail big box chains, fast food franchises and other consumer schlock, it is easy to pass through Adelanto without knowing it.

Hotpoint electric-iron inventor E.H. Richardson founded Adelanto in 1915 via a $75,000 land purchase after having done quite well from his iron patent residuals. Richardson was intent on developing one-acre home sites within the larger Victor Valley, located just north of Cajon Pass, for WWI veterans suffering from respiratory illnesses. Adelanto didn’t materialize into the master-planned community that Richardson had originally envisioned, and instead became known for its deciduous fruit orchards and later for its numerous poultry operations. This localized agricultural economy eventually gave way when the military took up residence at George Air Force Base (AFB). Throughout the Cold War years, George AFB sustained the community until 1992, when the facility was decommissioned during the Clinton administration.

Today, the abandoned, derelict ruins of George’s former base housing ominously face Victorville’s Federal Correctional Complex—one of four incarceration/detention facilities sited near or within Adelanto’s town limits. The military base now serves as the Southern California Logistics Airport, operating as a civilian “global intermodal logistics gateway to the Western United States.”

Doing Time with a View

During the early 1990s, as the impending base closure was looming, town officials sought new economic stability by shifting to an “incarceration infrastructure,” not unlike many other struggling downtrodden Californian communities seeking ways to fiscally support themselves.

Built in 1991, Adelanto’s first prison was initially operated as a state-run correctional facility and was later purchased from the city in 2010 for $28 million by Florida-based GEO Group, Inc.—the second largest for-profit private prison contractor in the U.S. GEO immediately converted the facility into the Adelanto Detention Center, resulting from a contractual agreement signed in 2011 with U.S. Immigration and Customs Enforcement (ICE). A second detention center located just west of the original prison, was constructed by GEO in 2012. These combined east and west detention centers house the highest number of immigrant detainees in California—on average 1,100 a day and include those waiting for asylum hearing outcomes. GEO’s 2015 annual report states that $1.84 billion in total revenue was received that year from their combined ICE operations. However, management of GEO’s Adelanto ICE facility has a troubled history and is not without criticism—it was the epicenter for the 2013 immigration protests. KPCC also reported in 2015 that three detainees have died over the five years since the facility opened due to “lapses in care.”

With these three existing prison facilities, plus a fourth voted through by city the council in late 2015 and a fifth proposed by GEO (previously considered but later withdrawn due to community opposition), it is understandable why Adelanto has been unabashedly branded as a prison town. Is doesn’t help that a high security U.S. Federal Penitentiary in Victorville is located just beyond its eastern city limit border—inevitably adding to Adelanto’s unflattering prison reputation.

And while Adelanto welcomed the prisons into its community during the 1990s, the city failed to require the prisons to hire workers from within Adelanto, forcing locals to compete with other Victor Valley residents for jobs here. Still, the combined prisons are currently listed as Adelanto’s largest employers. About $160,000 is collected annually for housing inmates and detainees within city limits. However, the revenue stream has failed to keep the town financially above water, so by 2010, the City of Adelanto faced insolvency and nearly went bankrupt.

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Adelanto councilman John "Bug" Woodard pictured with a local grower's "mother trees" that will be later cloned for large-scale marijuana cultivation. Photo: Kim Stringfellow.

Enter John “Bug” Woodard Jr., 58, a first-time Adelanto City councilman, voted into office during late 2014. After serving as a former board member for the High Desert Tea Party, he was encouraged to run for Adelanto’s city council by the San Bernardino County Young Republicans. Still, Woodard prides himself for not being a “career politician” even though he plans to run for reelection in the next cycle.

John originally hails from Glendora but relocated with his wife Katy to the Victor Valley from Pismo Beach in 1998. Besides his councilmember role, Woodard wears a variety of entrepreneurial hats including that of a real estate broker, a music festival promoter and online seasoning salesman. Woodard additionally finds time to help raise three small grandchildren whom he and Katy adopted a few years ago.

John, who has the appearance of an ardent Grateful Dead fan, is well known in these parts for hosting his annual Woodystock Blues Festival at his rural ranch property east of Apple Valley. This affiliation, plus a radical initiative that he and his fellow councilmembers pitched to voters in an effort to bring the city out of its fiscal slump, branded Woodard as a “left-leaning hippy,” for those not familiar with his more conservative personal politics.

The proposal, a controversial ordinance licensing large-scale indoor cultivation of medical grade marijuana within the town’s designated industrial zoned district was originally solicited by Woodard and other Adelanto city officials, including Mayor Richard Kerr via Pasadena entertainment lawyer and medical marijuana advocate F. Freddy Sayegh. Woodard became the first councilmember to support and promote the initiative, which both local law enforcement and the city’s school board had contested. When Ordinance No. 545 passed in a 4-1 vote in November 2015, local attitudes began to shift.

Adelanto is the second city in Southern California to allow legalized, large-scale cultivation of medical marijuana. Desert Hot Springs, Palm Springs’ fiscally troubled next-door neighbor, was the first to do so in 2014. After the ordinance passed in 2015 things began moving very quickly for Adelanto: John regularly spied darkly-tinted, pricey vehicles belonging to would-be investors, including a rare gold Bentley, cruising the warehouse district. Requests for commercial marijuana cultivation and manufacturing permits soon began pouring in.

Initially, city officials had planned to limit the number of commercial marijuana cultivation permits to six, but decided later to expand zoning in response to market demand. By early 2016, twenty-seven companies had secured the non-refundable refundable $7,000, 12-month commercial cultivation or manufacturing permit within Adelanto’s designated warehouse district, which has historically housed forty-four manufacturing businesses, including a now-defunct yacht company, plus the city’s second largest employer General Atomics, known for the development and production of military drones.

As of February 2016, thirty-two permits have been licensed and it seems that a handful of celebrity entrepreneurial growers have expressed interest in doing so, including Ky-Mani Marley, one of Bob Marley’s sons, B-Real of Cypress Hill, and Tommy Chong, plus some other well-known musicians and athletes. Other investors, including Sayegh’s Adelanto Research Facilities, will concentrate on medical marijuana research and development of cannabinoid-based treatments for Alzheimer’s, pediatric epilepsy and various forms of cancer.

Although first voted down, medical marijuana dispensaries may be allowed to operate in Adelanto depending on whether or not a new, upcoming 2017 ordinance slated for vote passes. Woodard is pushing to eliminate the proposed dispensary zone as he feels that it doesn’t make sense to direct medical cannabis patients to only one area of the city. Adelanto’s plan will allow three to four dispensaries to set up shop based on one dispensary per every 8,300 citizens.[1] Still, Woodard feels that the city may need to allow additional dispensaries within its borders because Adelanto currently stands as the only municipality in the region to allow them. The city will, of course, collect sales tax on all medical marijuana sales plus any future legal sales of recreational pot.

This time around, too, city officials made sure that the initial ordinance included a requirement for cannabis cultivation employers to hire half their workforce locally. This is welcome news as Adelanto’s unemployment rate hovers around 10.8% (the nation average is 5.20%).

Not long after the ordinance was passed, Newport Beach businessman Don Kojima swept up forty-two prime acres within the “zone” for a measly $375,000, setting off a flood of investors looking for similar deals, thus tripling property values overnight. Some lucky Adelanto property owners found themselves extremely flush after selling outright or moving their businesses to other Adelanto locations not zoned for lucrative cannabis cultivation.

For instance, the OC Register reported in February 2016 how “one property valued at $1.5 million was flipped for $4 million.” The Sacramento Bee stated last year that five acres of land, originally purchased for $350,000 by CalCann Holding Corp. and intended for cultivation, was later resold for a whopping $1.8 million. It is apparent that every real estate purchase and investment conducted here must be financed in hard cash as banks are prohibited by federal law to loan to businesses that grow, process or sell cannabis. Regardless, Adelanto’s land green rush was on.

California’s medical marijuana industry accounts for half of legal sales of the substance within the U.S. and yielded $2.7 billion in sales revenue in 2015. [2] With the legalization of recreational pot in November 2016, sales are expected to double. At full production, it is projected that up 300,000 pounds of cannabis will be grown and processed annually in Adelanto. [3] In turn, all cannabis-related activity conducted within Adelanto city limits, including cultivation, transportation, testing and sales, will be taxed at five percent. This tax combined, with other commercial activity and property taxes, could potentially provide upwards of a million dollars a month—a windfall for the cash strapped city whose current general fund budget runs $13 million annually.

Woodard is not only excited about the profits the city will bring in but also how this new source of revenue can be harnessed to improve the overall quality of life for local Adelantoans. Indeed, when I toured one of the designated industrial warehouses one unusually rainy afternoon with John, we discussed how this initiative would soon dramatically remake Adelanto as it exists today.

I was especially encouraged by a conversation with one local investor who graciously led John and myself on a tour of his clone grow room within an existing unfinished warehouse space undergoing a significant electrical renovation. This gentleman, who, with his family, owns and operates a convenience store chain within the Barstow area, are expanding into the cannabis cultivation business and are considering opening a local dispensary to market and sell their product.

Inside, the lush green “mother” trees, grown for cloning, represent a variety of cannabis strains, including Girl Scout Cookies, LA Confidential, Northern Lights plus “OG” (Original Gangster). Under bright grow lights and whirring fans we discussed how the ordinance has the potential to radically change the face of Adelanto for the better. Our guide was genuinely hopeful that the incoming revenue would provide much needed infrastructure improvements and attract support businesses, including security, construction, maintenance, sales, distribution and shipping, along with management positions that would employ local residents. He also expressed his concern that it is this industry’s responsibility to lead the way in implementing renewable energy sources into the entire production loop, stating that “this warehouse alone will require as much electricity as 150 average residential homes.” Their plan is to source at least half their energy demand from a combination of solar and cleaner burning natural gas.

Commercial Cannabis’ Indoor Carbon Footprint

Today, it is estimated that indoor cannabis cultivation consumes nearly three percent of California’s overall electricity output—equal the average electricity use of one million households. Additionally, indoor cannabis cultivation emits carbon dioxide emissions equal to those produced by one million average cars and overall consumes one percent of the nation’s total electricity use. [4]

Evan Mills, a senior scientist at the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, published a widely circulated 2012 paper, titled “The carbon footprint of indoor Cannabis production”[5] listing these astonishing statistics and detailing the high energy demands of intensive indoor commercial cannabis cultivation. Another report published in 2016 in the Columbia Journal of Environmental Law states how energy costs account for one-third of its total production costs for this method of indoor cultivation. [6] As the industry expands when other states legalize marijuana, the strain on electricity grids throughout the U.S. will “grow exponentially” beyond what many municipalities can actively sustain.

Indeed, Denver’s electrical grid was overwhelmed from the high energy demands of its legalized growing facilities during 2014, when it was reported by The Denver Post that 200 kilowatts of electricity were sucked up by its 354 indoor cultivation operations—more than double the electricity required by these enterprises in 2012. Desert Hot Springs (DHS) has, too, been experiencing excessive demands on its spare electrical grid as large-scale legal cultivation multiplies within its own city limits. Despite the high concentration of industrial wind turbines and solar located throughout the area, Southern California Edison stated that it could take up to nine years to boost DHS’ existing electrical grid to accommodate the additional loads required by cannabis growers.[7]

Although Adelanto is poised to lead the way in renewably produced cannabis cultivation, city officials did not require a certain percentage of electrical usage from localized solar or wind within its 2015 ordinance. Councilman Woodard commented that, “the industry will naturally move in that direction to keep costs down on the bottom line.”[8] And that is likely to happen, as the 2015 Medical Marijuana Regulation and Safety Act states that there will indeed be future regulations in place to offset carbon emissions for indoor cannabis cultivation.

To be fair, many existing warehouse buildings under conversion within the cultivation zone are not capable of sustaining loads from large rooftop solar arrays. In addition, the energy produced by these most likely would not provide enough electricity to power the grower’s excessive energy requirements. Still, new construction can be designed to handle rooftop solar, and there is adjacent undeveloped land that could be potentially sourced for this purpose. With exorbitant costs and heightened public scrutiny of the industry’s energy production demand, it behooves cannabis growers and investors alike to opt in and willingly outfit their operations sustainably. Plus this is great marketing tool.

On February 2, 2017, a ground-breaking ceremony took place for Adelanto’s new HDO Industrial Park, a $60 million, 630,000 square-foot parcel consisting of twenty-one buildings that will provide space for cultivation, manufacturing and other related activities in the city’s newest expansion zone. The company overseeing the project is Industrial Integrity Solutions (IIS), which will provide 550 permanent jobs with 225 for Adelanto residents, and will generate over $2 million in annual tax revenues for the city. Additionally, IIS will provide a $100,000 charitable contribution to support local Adelanto charities servicing its residents.

The ground-breaking does indeed signal that things are definitely looking up for Adelanto’s residents, but it remains to be seen whether the city is able to sustain this bold new foray into industrial-scale marijuana cultivation. As more California municipalities suffering similar financial woes join the pot cultivation fest, as they did in during the 1990s with prisons, there will most likely be an excess of legal marijuana flooding the market. Who knows how the pot business will fair over the long term? I guess we will just have to wait to see.

I would like to thank Councilman John “Bug” Woodard for graciously showing me around Adelanto one rainy afternoon. This article is co-published with KCET Artbound. Visit Artbound’s Mojave Project page here.